ROC Update: Temporary Financing

Details

April 16, 2004

While temporary financing is allowing Royal Olympic Cruises (ROC) ships to sail, time is ticking for the beleaguered cruise line, as the company has only six months left to continue working with mediators in search of a solution to its monetary woes.

Beyond that, if things are still unsettled, the company would enter "another stage of administration we are not thinking about at this point," according to Costas Markakis, ROC's legal adviser. ''But that would be a very unexpected case," he added.

ROC Continues Sailing

As of April 5, ROC's World Renaissance has resumed service, joining the Triton on three- and four­-day cruises to the Greek Islands and Turkey.

In early May, both ships will be joined by the Odysseus, following the same itinerary.

On April 30, the World Renaissance will be doing seven-day cruises to the Greek Islands and Istanbul.

The Seawing, chartered to Sun Cruises, will be operating in May, and sailing from Malta on seven­ day cruises in the Eastern Mediterranean until September. But according to a spokesperson from Sun Cruises, the prospect of generating better revenue will most likely result in capacity reduction for the Seawing.

"It will probably happen next season," she said. "The ship just doesn't generate what we need."

But in spite of the negatives the ROC debacle has had on the company, Evan Pezas, director of marketing and sales for the line, said that the cruise industry "has accepted us with relief and is happy to see us cruising again," also adding that ROC is "trying to once again regain the confidence of travel agents and tour operators all over the world."

An Uncertain Future

When asked about a five-year plan for the company, Pezas noted that it was hard to predict what will happen, adding that the uncertainty of world events compounded with the Mediterranean being a "volatile area for travel" makes it nearly impossible.

"The war in Kosovo is clearly one of the reasons for ROC's downfall," Pezas pointed out. "War has an effect on everyone, but with nearly 70 percent of our business in the Mediterranean, it hit us very hard."

ROC's head office went from 320 employees down to 108 in the last few weeks. "We lost a lot of good colleagues in addition to losing two of our ships," Pezas said.

KfW, the German bank that purchased the Olympia Explorer and Olympia Voyager for a combined cost of nearly $180 million at the end of March, plans on selling both ships "as soon as possible," according to Ludolf Rischmuller, head of the KfW Workout Group in charge of the ROC auction.

"It cost us too much money for the ships to just sit there," he said.

While specifically not excluding any lines, Rischmuller noted that he is focusing more on the "upper tiers" of the industry.